The path of development of Islamic banks.. Where will Islamic banks reach

The path of development of Islamic banks.. Where will Islamic banks reach? The future and status of Islamic banking The Islamic financial industry has witnessed a remarkable growth in the volume of assets over the past years. The volume of its assets is about three trillion US dollars, with an annual growth rate of more than 10%. The Islamic banking sector is still the largest component of the Islamic financial industry, as it acquired about 68 percent of the total assets of the Islamic financial industry, with assets of about two trillion US dollars, which reflects the importance of continuing to develop This sector, enhancing its flexibility and preserving the integrity of its financial positions. The role of Islamic finance has emerged in promoting financial inclusion, as it provides solutions to groups that may have been reluctant to deal with the traditional banking sector for various considerations. It is known that designing financial products and services that meet the needs of individuals and companies is an important element to promote financial inclusion in various countries of the world. Therefore, designing financial products and services that are compatible with Islamic Sharia will lead to attracting a segment of society that wants to obtain On these services and products, in addition to that, the use of partnership contracts and risk sharing is a practical and effective alternative to financing based on traditional debts. These financing instruments, in which risks are shared, can provide services and products designed in accordance with the provisions of Islamic Sharia, such as insurance (Takaful), microfinance, and financing of small and medium enterprises, which will enhance access to financing. The Islamic banking sector, as you know, contains unique tools for the redistribution of wealth, such as zakat, charity, endowment, and a good loan. The financial system The banking system is today more prepared to absorb the financial and economic shocks and risks that it may be exposed to, resulting from the application of capital and liquidity requirements according to Basel III standard. Adopting the requirements of Basel (III) enhances the quality and quantity of capital in banks, through banks retaining capital of high quality and quality, characterized by a high ability to face risks and absorb losses. In the same context, the application of International Financial Reporting Standard No. (9), which took the predictive aspect into account, mitigated credit risks by building financial provisions to face default risks. As for banks that are compatible with Islamic law, many central banks have applied the amended capital adequacy standard issued by the Islamic Financial Services Board, as well as applying the financial accounting standards issued by the Accounting and Auditing Organization for Islamic financial institutions. (AAOIFI).The efforts of the Islamic Financial Services Council to issue many standards and guiding principles that enhance the safety of the Islamic banking sector, which covered many aspects that take into account the privacy of Sharia-compliant bank business models Islam, for example Liquidity, stress testing, risk management, banking supervision, disclosures, market discipline, deposit guarantee. In this context, the Basel Committee on Banking Supervision recently issued a consultation paper on amendments related to the basic principles of effective banking supervision, according to which it proposed a set of important amendments that take into account developments in business models Banks reflect regulatory and supervisory developments in many aspects, including: emerging financial risks, operational flexibility, systemic risks, macro-prudential aspects of supervision, climate-related financial risks, digitization of finance, non-bank financial intermediation, risk management practices, and others. . This meeting is considered as a starting point to start preparing and discussing the implications of those proposed amendments to the basic principles of supervision of Islamic finance that were previously issued by the Islamic Financial Services Board in 2015, where the interest in continuing efforts related to the development of Islamic banking takes into consideration new developments, challenges and risks surrounding the global financial system in general.